China's excess liquidity is centralized at bank system and broad money supply level. The main cause for excess liquidity lies in the increase of liquidity of huge long-term accumulated stock money, furthermore, the promotion of derivative ability of credit money and large foreign speculative capital entry further intensify the excess liquidity phenomenon. The solution to the problem of excess liquidity should control the loan release of commercial banks in short term and should adjust currency exchange policy in middle-term and weaken the expectation of Renminbi reevaluation and should focus on changing governmental duty and raising the independence of central banks.